Our fourth quarter 2023 monetary effects are expected to be released on February 21, 2024.
2023 Production Results
The table below provides a summary of Teck’s unaudited percentage of primary product production and sales for the fourth quarter of 2023 and annual production in 2023 compared to our previously disclosed annual guidance. Our 2023 annual production was impacted by a number of challenging situations encountered in our operations during the year, as defined below. In our metallic coal business unit, production was higher than our previously published direction. Production from our base metals business was below the lowest level of our previously disclosed management levels.
Notes:
Advice
Our production direction, unit load and capital expenditures for 2024 as well as our annual production direction for 2025-2027 are set out in the tables below. The management levels below reflect our operating plans, which come with known dangers and uncertainties. Events such as excessive weather, unplanned operational shutdowns, and other disruptions can have a real effect beyond those estimates. Our unit prices are calculated based on production volumes and any deviation from estimated production levels will have an effect on unit prices.
We have included range-based direction for all disclosed management categories and provided additional annual main points for our three-year production direction to describe the expected production fluctuations during this period.
Annual forecasts for 2024 and three-year production forecasts have been provided for our steelmaking coal business. The forecast is based on 100 percent and reflects the exchange of minority interests through NSC of 2. 5% in Elkview Operations and through POSCO of 2. 5% in Elkview Operations and 20% in the Greenhills joint venture. The closing of the sale of the remaining stake (77%) in Elk Valley Resources to Glencore plc is expected to occur in the third quarter of 2024, subject to the satisfaction of standard conditions, adding receipt of approval under the Investment Canada Act and festival approvals. . in various jurisdictions.
We remain very focused on managing our controllable operating expenses. However, like the mining sector as a whole, we continue to face inflationary pressures across our operations, which has increased our operating expenses and capital expenditures compared to previous years. Underlying mining drivers such as stripping rates and haul distances remain stable, inflationary pressures on key input rates are expected to persist into 2024. Cost pressures on certain key supplies, adding mining equipment, hand of work and contractors, as well as energy rates in Chile. and adjustments to diesel rates are reflected in our annual capital spending and unit load guidance for 2024.
Production guide
The table below shows Teck’s unaudited production percentage of our core products in 2023 and our guidance for 2024 and the next 3 years.
(Units in thousands of tons, iron and metallic coal)
Sales Tips
The table below shows our sales guidance for the first quarter of 2024 for select products.
Note:
Unit Cost Guidance
Remarks:
Copper
Total copper production in 2024 is expected to increase particularly to between 465,000 and 540,000 tonnes, to 296,500 tonnes produced in 2023.
QB was operating close to its nominal production capacity at the end of 2023, and this continued through 2024. At times, recoveries have been in line with expectations and the most sensitive grades remain within expected levels. The operation will focus on reliability, consistency and increased availability, and we expect to produce between 230,000 and 275,000 tonnes in 2024. This is slightly lower than our production forecast for the past three years, as those forecasts assumed that all typical reliability issues would be resolved. 2023. Due to the construction delay, some of those issues are expected to be resolved in the first part of 2024. We expect QB to operate at planned throughput between 2025 and 2027, with annual production forecasts expanding between 2025 and 2027. 280,000 and 310,000 tons.
Highland Valley Copper production is expected to increase in 2024 as we move toward the higher-grade Lornex pit and due to advancing mill availability. Strong production is expected to continue between 2025 and 2027, with superior ore grade and processing throughput. of Lornex fabrics in this period.
Our percentage (22. 5%) of copper production at Antamina remains strong and in line with our previously disclosed guidance for 2024 and the next three years.
Carmen de Andacollo continues to face excessive drought conditions, resulting in water restrictions that have an effect on production, and production in 2024 is expected to be similar to that of 2023. Measures are being taken to mitigate those risks, and a solution will likely be available in 2025. As a result, and thanks to higher grade ore, production is expected to increase between 2025 and 2027, compared to 2024.
COP1 net unit prices after by-product credits, adding QB, are expected to be between USD 1. 85 and USD 2. 25 per pound in 2024. This figure is higher than our guidance for 2023 due to continued inflationary effects on the charge of Insurance that key supplies, the addition of mining equipment, tires, labor and subcontractors will last through 2024 and are now incorporated into our core source contracts.
Net unit prices of QB1 after credits through products are expected to range from US$1. 95 to US$2. 25 per pound in 2024. Unit prices are expected to remain the highest in 2024, especially in the first part of 2024, due to the choice of logistics prices required as a result. the delay in the port structure in the first part of this year, the lack of molybdenum production in the first quarter due to the delay in the structure of the molybdenum plant, and the reduction in copconsistent with production due to the closures Required finals during the first trimester. Compared to previous forecasts, QB has faced persistent inflationary pressures, adding higher prices passed on through Chile’s power grid regulator. Once QB is in a solid, consistent state, we will provide further guidance. on unit prices.
Zinc
Total zinc production in 2024 is expected to be between 565,000 and 630,000 tonnes, up from 644,000 tonnes in 2023. Production over the next 3 years is expected to decline due to declining grades at Red Dog and declining zinc production at Antamina.
Red Dog is expected to produce between 520,000 and 570,000 tonnes in 2024. Red Dog’s annual production is expected to decline between 2025 and 2027 due to declining grades as we move into the latter stages of the current life of the Red Dog mine.
Our percentage (22. 5%) of zinc production at Antamina is expected to be between 45,000 and 60,000 tonnes in 2024, to 104,200 tonnes in 2023. According to Antamina’s mine plan, ore processed in 2024 will provide higher copper production and lower zinc production. than in 2024. than in 2023. The 2025 to 2027 mining plan produces more zinc in 2025 with relief in line with the long-term mining plan in 2026 and 2027.
Refined zinc production is expected to be between 275,000 and 290,000 tonnes in 2024, up from 266,600 tonnes in 2023. Production is expected to increase in 2024 due to increased availability of concentrate. The KIVCET boiler replacement announced in the past in our trail operations Advances in the second quarter of 2024, will mainly affect the lead circuit and with minimal effect to the zinc circuit.
Net unit prices of zinc1 after by-products in 2024 are expected to be between US$0. 55 and US$0. 65 per pound, above our forecast for 2023 due to continued inflationary effects on the loading of certain key supplies.
Steelmaking Coal
Steelwork coal production in 2024 is expected to be between 24. 0 and 26. 0 million tonnes, compared to 23. 7 million tonnes produced in 2023. Production is expected to remain at those levels between 2025 and 2027.
We expect the adjusted monetary cost of our metallic coal site sales1 in 2024 to be in the range of $95 to $110 per tonne. Compared to 2023, we expect continued inflationary effects from certain key materials to persist into 2024. adding up consistently with energy and maintenance prices, as well as contractor and labor prices. Transportation unit prices are expected to be between $47 and $51 per ton in 2024.
Capital Expenditure Guidance
Our 2024 capital expenditures are expected to be reduced, especially from 2023 guidance levels, primarily due to minimizing QB2 progression capital expenditures, as we complete the allocation.
ÀQB2, the structure of the molybdenum plant was substantially completed in December 2023 and commissioning has begun. Commissioning of the molybdenum plant is expected to be completed by the end of the second quarter of 2024. Construction of offshore port facilities is progressing. as planned and expected to be completed by the end of the first quarter of 2024. The pier was completed in December, representing an important milestone in the structure of the port. Our previously published QB2 capital load guidance remains unchanged at between $8. 6 billion and $8. 8 billion, with $500 million to $700 million expected to be spent in the first part of 2024. No additional capitalized increase prices are expected in 2024.
Sustaining capital expenditure in 2024 is expected to increase marginally above 2023 guidance levels both in our zinc business unit as we complete boiler repairs at our Trail Operations, and in our steelmaking coal business, as the Elkview Operations’ administration and maintenance complex project reaches the peak of its execution plan.
Capitalized stripping costs in 2024 are expected to decrease from 2023 guidance levels, which were a notable peak period of capitalized stripping to advance the development of mine pits to support future production in our steelmaking coal business.
Growth capital, QB2 progression capital, is prioritized in our copper expansion assignments and as we focus on completing feasibility studies, advancing detailed engineering work, making allocation execution plans, and enabling advancement, specifically on the Highland Valley Copper Life Extension Project (formerly HVC2040). In addition, we will try to map out the maximum effective path in terms of capital and aggregate price for QB expansion, based on the functionality of the existing asset base. We also plan to continue to expand our Portfolio Characteristics over the medium to long term with prudent investments to advance the price trajectory.
As stated above, we do not plan to approve any expansion projects in 2024 and aim to advance projects in the near term for possible approval in 2025. Growth projects will need to generate a strong risk-adjusted return and compete for capital. in line with Teck’s capital allocation framework.
Note:
The table below shows our capital expenditure guidance for 2023 and 2024.
Remarks:
Pickling of caps
Note:
Use of Non-GAAP Financial Measures and Ratios
Our financial results are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. This document includes reference to certain non-GAAP financial measures and non-GAAP ratios, which are not measures recognized under IFRS, do not have a standardized meaning prescribed by IFRS and may not be comparable to similar financial measures or ratios disclosed by other issuers. These financial measures and ratios have been derived from our financial statements and applied on a consistent basis, as appropriate. We disclose these financial measures and ratios because we believe they assist readers in understanding the results of our operations and financial position and provide further information about our financial results to investors. These measures should not be considered in isolation or used in substitute for other measures of performance prepared in accordance with IFRS. For more information on our use of non-GAAP financial measures and ratios, see the section titled “Use of Non-GAAP Financial Measures and Ratios” in our most recent Management Discussion Analysis, which is available on SEDAR+ (www.sedarplus.ca). Additional information on certain non-GAAP ratios is below.
Total cash unit costs – Total cash unit costs for our copper and zinc operations includes adjusted cash costs of sales, as described below, plus the smelter and refining charges added back in determining adjusted revenue. This document allows a comparison of total cash unit costs, including smelter charges, to the underlying price of copper or zinc in order to assess the margin for the mine on a per unit basis.
Net Unit Costs: Net unit prices of the main product, after deducting margins from co-products and by-products, is also not an unusual measure in the industry. By deducting the co-product and by-product margin consistent with the unit of the main product, the mine margin on a unit-consistent basis can be presented on a single measure to compare with other consistent operations.
Adjusted Currency Charge for Sales – The adjusted monetary charge for sales for our copper and zinc operations is explained as the charge for product delivered at the port of shipment, excluding depreciation and amortization charges, one-time collective bargaining agreement prices, or inventory impairment. Provisions and sales charges for by-products. It is not unusual in the industry to exclude depreciation and amortization because those prices are not monetary and the discounted monetary valuation models used in the industry override long-term capital expenditure expectations for those amounts.
Adjusted Cash Cost of Site Sales: The adjusted monetary charge of site sales for our coal operations is explained as the end-of-mine product charge, depreciation and amortization charges, outbound transportation prices, and any one-time prices similar to the collective bargaining agreement and inventory impairment provisions.
Cautionary Statement on Forward-Looking Statements
This document contains certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to as “forward-looking statements”). These statements relate to future events or our future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “should”, “believe” and similar expressions is intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. These statements speak only as of the date of this document.
These forward-looking statements include, but are not limited to, statements relating to: all indications contained herein, including, but not limited to, production, sales, pricing, unit prices, capital expenditures, transportation prices, charge relief. and other indications under the heading “Tips” and in this press release; our expectations related to inflationary pressures and emerging prices of key inputs, adding hard work and energy prices for mining equipment; our production and operation expectations through 2027 at our QB, Highland Valley Copper, Antamina, Carmen de Andacollo and Red Dog operations; expectations related to our QB project, adding the schedule for the final touch of remaining construction, commissioning and commissioning; potential avenues for the expansion of our QB operations and the progression and sanction of any expansion projects.
These statements are based on a number of assumptions, including, among others, assumptions relating to general business and economic situations, interest rates, commodity values and electric power; acts of national or foreign governments and the latest results of legal proceedings; source and demand, deliveries, and the point and volatility of values of copper, zinc and steelmaking coal and our other metals and minerals, as well as petroleum, vegetable fuels and other petroleum products; our ability to acquire equipment, materials and operating facilities in sufficient quantities and on a timely basis; the availability of qualified workers and contractors for our operations, including our new developments and our ability to attract and retain qualified workers; our ability to obtain, comply with and renew permits, licenses and leases in a timely manner; the timing of receipt of permits, licenses, leases and other regulatory and governmental approvals for our progression assignments and other operations, including mining expansions; our ability to obtain sufficiently good transportation, including rail and port facilities, for our products; our production costs and our production and productivity points, as well as those of our competitors; continued availability of water and energy resources for our operations at an adequate price or at all; credit market situations and money market situations sometimes; the availability of financing to refinance our loans as they mature or to fund our progression allowances on moderate terms; provide appropriate letters of credit and other monetary collateral paperwork to regulators for reclamation and other bonding requirements; the negotiable negotiation of collective agreements with unionized workers; the effect of adjustments in the Canadian dollar versus the US dollar exchange rates, Canadian dollar to Chilean peso exchange rates and other exchange rates on our charges and effects; engineering and structure schedules and capital charges for our progression and expansion allocations; the benefits of generation to our operations and progression allowances, closure charges and environmental compliance charges at times in our operations; competition in the market; the accuracy of our estimates of coal and steel reserves and resources (aggregated with respect to size, grade and recoverability) and the geological, operational and pricing assumptions on which they are based; the latest results of our negotiations on the value and volume of steelmaking coal with our consumers; the latest results of our negotiations with consumers on processing and refining rates for copper, zinc and lead concentrates; any continuing or resurgent effects of the COVID-19 pandemic on our operations and allocations and global markets; resolution of environmental and other procedures or disputes; long-term cheap electrical power source for the Trail smelter and refining complex; and our ongoing relationships with our workers and with our business and joint venture partners. The assumptions related to QB operations and the assignment of QB2 come with the existing assignment assumptions and the assumptions contained in the final feasibility study, as well as the absence of other unforeseen elements and negative impact on the various contractors, suppliers and subcontractors that impair their ability to obtain goods and facilities as planned. Assumptions relating to the charges and benefits of our assignments come with assumptions that the applicable assignment is constructed, commissioned and operated in accordance with existing expectations. Expectations related to our operations are based on assumptions related to operations. Our guidance statements come with information and footnotes that contain other assumptions related to our guidance, and assumptions related to certain other forward-looking statements accompany those statements in the document. Statements regarding long-term charges or production volumes are based on assumptions related to operational matters and on the assumption that demand for products develops as expected, that consumers and other counterparties meet their contractual obligations, that plans Operation and investment will not be interrupted by disorders such as mechanical disorders. breakdown, lack of availability of portions and materials, labor disputes, interruption of transportation or public services, adverse weather situations or social unrest, and that there are no significant unforeseen diversifications in the load of force or materials. Statements regarding expected steelmaking coal sales volumes and average steelmaking coal values depend on the timely arrival of vessels and the functionality of our steelmaking coal loading facilities, as well as the point of sale at existing values. cash. The above list of hypotheses is not exhaustive. Events or instances may simply cause actual effects to vary materially.
Factors that may also cause actual effects to vary materially include, but are not limited to, adjustments in raw material and electrical energy prices; adjustments in the market demand our products; adjustments in interest and currency exchange rates; acts of governments and final results of judicial proceedings; erroneous geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources); Unforeseen operational difficulties (including failure of plant, apparatus or processes to perform in accordance with expressions or expectations, higher prices, unavailability of fabrics and apparatus, government actions or delays in receipt of permits, licenses and leases or other government approvals, tax adjustments). tariffs or tariffs, business disruption or other stress tactics, adverse weather situations, social unrest or similar unforeseen health, safety and environmental occasions); union disputes over hard work; any resurgence of COVID-19 and relevant mitigation protocols; Political risk; social unrest; failure by consumers or counterparties (including logistics providers) to fulfill their contractual obligations; adjustments to our credit ratings; unforeseen increases in structure prices for our progression allocations; the difficulty in downloading lets in; Failure to consider rental or environmental considerations in valuations, as well as adjustments or further deterioration of general economic conditions. The amount and timing of capital expenditures depends, among other things, on the ability to discharge permits, appliances, supplies, fabrics and labor in a timely manner and at expected prices. Some operations and assignments are not controlled through us; schedules and prices would possibly be adjusted through our partners, and the timing of expenses and operation of the transaction or assignment are not under our control. Certain of our other operations and allocations are controlled through joint agreements in which we may not have control over all decisions, possibly causing effects that would vary from existing expectations. Current and new technologies, such as our water treatment efforts in Elk Valley, may not work as intended, and ongoing monitoring could reveal unforeseen environmental situations that require additional corrective measures. QB’s production and sales, pricing and capital expenditure forecasts rely on, among other things, our ability to continue to advance remaining structure, commissioning and commissioning paints as currently planned. QB2’s assignment prices would also possibly be affected through claims and other proceedings possibly brought against us in connection with the prices and having an effect of the COVID-19 pandemic or other matters. Red Dog’s production would also likely be affected by water levels at the site. Unit prices in our copper business unit are affected by higher profitability at Antamina, which would potentially result in higher contractor participation and royalty expenses. Sales to China would likely be affected by general and express port restrictions, Chinese regulations and policies, and general operational and production risks.
We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning risks, assumptions and uncertainties associated with these forward-looking statements and our business can be found in our Annual Information Form for the year ended December 31, 2022, filed under our profile on SEDAR+ (www.sedarplus.ca) and on EDGAR (www.sec.gov) under cover of Form 40-F, as well as subsequent filings that can also be found under our profile.
About Teck As one of Canada’s leading mining companies, Teck is committed to guilty mining and mineral progress with significant business clusters focused on copper, zinc and steelmaking coal. High-quality copper, zinc and steelmaking coal are necessary for the transition to a low-carbon world. . Headquartered in Vancouver, Canada, Teck’s stock is indexed on the Toronto Stock Exchange under the ticker symbols TECK. A and TECK. B and on the New York Stock Exchange under the symbol TECK. Learn more about Teak on www. teck. com or follow @TeckResources.
Teck Investor Contact: Fraser PhillipsSenior Vice President, Investor Relations and Strategy604. 699. 4621fraser. phillips@teck. com Analysis
Teck Media ContactChris Stannell publishes604. 699. 4368chris. stannell@teck. com Relationship Manager